Americans had an easier time qualifying for a car loan in June, but only relative to the worst month in years.
The Dealertrack Credit Availability Index tracks how difficult it is to qualify for all types of car loans. The index rose by 0.8% in June, reflecting that auto credit was less challenging to get than the month before.
Kelley Blue Book parent company Cox Automotive owns Dealertrack.
May was the worst month for car loans in more than two years. A few factors helped ease the market for borrowers in June. Lenders asked for smaller down payments and were willing to lengthen the average loan term, which can decrease the cost of monthly payments.
Loans to purchase a certified pre-owned car loosened more than loans for new cars or other used car types.
But all lenders – including banks, credit unions, and auto-focused finance companies that loan through dealerships – approved fewer loans last month. The share of subprime loans (those given to borrowers with credit scores under 620) fell. Subprime and deep subprime loans were nearly a quarter of the market as recently as 2018 but are barely 8% today.
The Conference Board Consumer Confidence Index increased by 7.0% in June as views of the present situation and future expectations improved. Consumer confidence was up 11.5% year over year. Plans to purchase a vehicle in the next six months declined but were little changed year over year.
